Which of the following is TRUE about the long-run aggregate supply curve?
A) It is vertical at the level of potential GDP.
B) It shows the relationship between the price level and real GDP when the economy is at full employment.
C) It does not shift in response to temporary changes in aggregate demand.
D) All of the above are true.
D
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The additional benefit to a consumer from consuming one more unit of a good or service
A) is equal to consumer surplus. B) is equal to the opportunity cost of consuming the good or service. C) is equal to marginal benefit. D) is equal to economic surplus.
An industry is in long-run competitive equilibrium. The price of a substitute good increases.
A. New firms will enter the market. B. Firms will begin earning economic profit. C. The product price will rise. D. a and b E. all of the above